Decisions, decisions, decisions.
We all have so many important decisions to make. Well, today I want to share with you a tool to help you decide which project or idea you should pursue next.
As you can see here, I’ve created a little Excel spreadsheet, which I call the Decision-Making Matrix. This particular matrix is based on one developed by Chris Guillebeau in his book The $100 Startup, and I’ve found it to be a very useful tool as I decide which project or idea I should tackle next.
It doesn’t matter if you’re making decisions for your organization, your team, or even personal decisions—this tool can come in very handy.
So, how does the Decision-Making Matrix work?
You can see on the left-hand side, I’ve got a selection of hypothetical ideas—these are things that I’m considering pursuing, but I’m not sure exactly which one I should tackle first. Where should I put most of my effort right now?
The Decision-Making Matrix helps us add quantitative data so that we can get a score—a point total—that can help us decide which task or project we should tackle next.
At the bottom of my spreadsheet here, you can see I have some definitions of the four different criteria that we’re going to run these ideas through.
- Impact is defined as how much of an impact this project will make on my business and customers. All we need to do is plug in some numbers between 1 and 5. A value of 1 means little impact on my business or customers, while a 5 means a huge impact.
- There are a couple of different ways to go about this. You can give each one a subjective number, say, this is a 4, that’s about a 4, and this is a 3. But what I like to do with the matrix is to use a stack ranking approach. I look at how many ideas I have on the left-hand side (in this case, I have five), and I make sure that each value from 1 to 5 is represented in the Impact column.
- This way, I avoid ending up with scores that are too even, and I compare the ideas against one another. This approach works well if you have between three and six different ideas. You could go beyond 1 to 5, depending on how many ideas you’re evaluating.
- Let’s start with Impact, and I’ll randomly throw in some numbers here for this example.
- Effort is defined as how much time and work it will take to create the project. It’s important to note that the numbering system here is different from the other three criteria. A value of 1 means a ton of work, while 5 means almost no work.
- Why is that? We want to pursue the project that gives us the highest score at the end of this exercise, so we want to prioritize projects that take less effort but yield great outcomes. Therefore, less effort (closer to 5) is rewarded.
- I’m going to plug in a few more numbers here. Again, this is just a hypothetical example.
Before I add values for Profitability, here’s another tip to make this tool really useful. As you can see, the values are summing up in real time, but I’m going to hide that column.
Why? Because I want to be as unbiased as possible as I go through this exercise. I might be biased towards one idea, and if I see that it’s only one point behind the leader, I might intentionally give it a higher score in Profitability or Vision than it deserves. By hiding the total score, I ensure that the final score will be a surprise and more objective.
- Profitability is straightforward—how much money will this project bring in? I’ll plug in a few more numbers here.
- Vision is something we often forget when evaluating our projects or ideas. We tend to focus heavily on Profitability, which is important, but Vision considers whether the project aligns with our overall mission and vision.
- A score of 1 means not close, while a 5 means very close. Let’s plug in some numbers here as well.
Now that we’ve given everything a quantitative value, we’ve run it through four sets of important criteria. Let’s go back and unhide the total column. Now, we have some total scores.
Looking at this, we see that Sales Training and Hire More Staff are tied with a score of 15. This doesn’t mean I should pursue both tasks simultaneously, but it gives me some great food for thought. These two are probably much more important and impactful to my business than the other ideas on this list, so I should seriously consider pursuing one of them immediately.
It’s also helpful to look at the ideas that didn’t score as well. In this case, both Customer Conference and Build a New Product scored a 9. You might want to review why that is—perhaps the Impact was minimal, or it didn’t align well with your Vision.
I’ll provide a link in the description below to this Excel spreadsheet so you can download it yourself. Try it out and plug in your own data and ideas. Check out the Decision-Making Matrix to help you make more productive decisions.
